• Mrityunjaya B Chavannavar
• Dr. S. C. Patil

Monetary Policy changes influences bank lending and this will have a direct or indirect effect on the operations of small and medium enterprises. Higher interest rates and inadequate credit availability have an effect on MSMEs performance. The effect is more severe during tight monetary policy as the interest rates would be higher and credit availability is tight. MSMEs find it difficult to access sufficient funds at cheaper cost hence the survival becomes a challenge. The paper examines the effect of interest rates and credit availability on MSMEs due to monetary policy changes. It is found that MSMEs investment activities slow down, shed the inventories, reshuffle loans, loan defaults increase and performance of gets affected during tight monetary policy.

Monetary policy, Interest rates, Credit, MSMEs, Effect.

"Interest Rate & Credit Availability Effects on MSMEs Due to Monetary Policy: An Observed Fact", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.5, Issue 3, page no.393-402, March-2018, Available :http://www.jetir.org/papers/JETIR1803078.pdf

"Interest Rate & Credit Availability Effects on MSMEs Due to Monetary Policy: An Observed Fact", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.5, Issue 3, page no. pp393-402, March-2018, Available at : http://www.jetir.org/papers/JETIR1803078.pdf